Asia stocks dip, Europe up after China assurances

Updated on: September 7, 2015 / 7:32 AM
/ AP

BEIJING - Asian stocks were mostly lower Monday while Europe rose after Chinese officials said market turbulence was ending and uneasy investors mulled the timing of a U.S. rate hike and looked ahead to data on China's slowing economy.

China's central bank governor, finance minister and securities agency tried to reassure investors over the weekend that market turmoil was ending. At a meeting of the Group of 20 major economies. People's Bank of China Gov. Zhou Xiaochuan said Beijing's intervention averted a bigger crisis, according to a central bank statement. After a four-day holiday weekend, investors were looking ahead to data this week that are expected to show weak trade but strong growth in retail sales. Also Monday, the National Bureau of Statistics reduced its estimate of 2014 economic growth, already a two-decade low, by 0.1 point to 7.3 percent.

"Whether or not we have realistically seen the lows in the various Chinese markets is yet to be seen, but the belief and assurance provided by the Chinese authorities over the weekend suggests we may see better days ahead," said strategist Chris Weston of IG Markets in a report.

A mixed report on August employment left investors wondering what the Federal Reserve might do about interest rates at a meeting this month. Friday's report showed the U.S. unemployment rate fell to a seven-year low but employers added fewer jobs than forecast. The Fed's deputy chairman said earlier that the U.S. central bank still was on track for a rate hike this year, but Friday's report fueled uncertainty about whether it will feel confident enough to act. The Fed has kept its benchmark interest rate close to zero since late 2008, which has pushed up stock prices.

Most U.S. financial markets are closed Monday in observance of Labor Day.

On Friday, the Dow Jones industrial average fell 272.38 points, or 1.7 percent, to 16,102.38. The Standard & Poor's 500 gave up 29.91 points, or 1.5 percent, to 1,921.22; the index ended the week down 3.4 percent, its second-worst weekly drop of the year. The Nasdaq composite slipped 49.58 points, or 1.1 percent, to 4,683.92.